GBTC Trading Volume Surges to $80m Following BlackRock’s ETF Application

The trading volume of Grayscale’s Bitcoin Investment Fund (GBTC) has experienced an almost four-fold increase, from around $16.1 million on June 14 to nearly $80 million five days later. This impressive growth can be traced back to BlackRock’s recent submission for a Spot Bitcoin ETF.

GBTC’s Share Price and Trading Volume Surge

This latest move has had a noticeable impact on GBTC’s share price. For the first time since May 10, GBTC’s share price climbed over $16. In comparison to the previous week, it has seen an increase of more than 24% and currently sits at approximately $15.9. 

Over the past few days, the discount between GBTC and BTC has seen a considerable reduction. Notably, during the morning trade, the share price discount of GBTC to Bitcoin (BTC) fell to as little as 33%, marking a reduction from last week’s 44% and the lowest since September last year. The discount is also lower than the 34% figure recorded at the beginning of March.

Grayscale’s current model doesn’t include a redemption mechanism for GBTC which could help narrow the discount gap, but this feature would be part of an ETF. The possibility of GBTC being converted into an ETF indicates the potential for traders to capture additional gains if Bitcoin’s price increases, especially if bought at a discount now.

BlackRock’s ETF

The application by BlackRock indicates that some significant Wall Street entities might be subtly endorsing the crypto industry and bitcoin ETFs. However, the future is uncertain as the SEC could potentially take action against the existing bitcoin futures ETFs instead of allowing spot funds to continue, even if Grayscale is successful in its legal case. 

Analysts have projected that a Bitcoin ETF won’t likely see a launch until at least 2024. Furthermore, even under the most optimistic circumstances, it could still take another year and a half before a Bitcoin ETF is introduced. This is significant for investors betting on the discount closure, as GBTC trades over the counter, which is subject to fewer regulations and potentially lower liquidity than traditional exchanges.